Wednesday, May 25, 2011

Producers in Peril

I have noticed that a lot of my producer clients don’t call me to negotiate agreements as often as they used to. They are not calling my competitors either because I’ve talked to them about this. I can’t blame anyone for not wanting to pay legal fees to negotiate a contract where the advance is small and there is a fairly good chance that they will never earn royalties.

I am thinking that one of three things is happening:

1. The producers are actually negotiating the agreements themselves, in which case, more power to them.2. They are not signing contracts at all, in which case the record company (or artist) and the producer are acting at their own peril.3. The producer is just signing what is put in front of him—which is what I worry about.

While it is probably statistically most often the case that most albums won’t sell enough to recoup their recording costs, there are also numerous examples of records that yield a soundtrack master use or television commercial years after their initial release. Without an unambiguous binding agreement and (hopefully) a letter of direction the producer may not have the ability to collect their share of the future income. I have seen examples of master use licenses pushing recordings from unrecouped to recouped status years after their initial release and the producer relying on their ancient agreements to get paid. It’s a beautiful thing.

I also worry that producers may be ignoring their share of Sound Exchange royalties, which are becoming a not insignificant source of income (and which are not subject to recoupment).

Finally, I worry that without carefully reviewing the document, producers might be agreeing to such punitive clauses as controlled composition clauses for producer/writers and my pet peeve, the re-producing restriction (no, not a form of state mandated population control).

I would urge any producer reading this to have the lawyer of their choice at least read the next agreement they are presented with. I can’t help but think that even a quick review be a worthwhile investment.